J.C. Penney to Close Underperforming Stores, Catalog
PLANO, Texas-J.C. Penney will close five underperforming stores, "wind down" its catalog and outlet operations and streamline both its call center operations and custom decorating business in an effort to focus on growth opportunities in the future, the company said this morning.
"We are focused on increasing profitability and accelerating our growth," said Myron E. (Mike) Ullman, III, chairman and chief executive officer, said. "To achieve this, we undertook a thorough evaluation of our operations to ensure we are managing costs and allocating our resources to the strategies that will best drive both our top and bottom line, with the objective of delivering enhanced returns to shareholders."
The company will close stores located in Morrow, Ga.; West Dundee, Ill.; Des Moines, Iowa; High Point, N.C.; and Culpeper, Va.; and one J.C. Penney Home Store located in Duluth, Ga. These six locations no longer meet J.C. Penney's profitability threshold, the company said. It will also end its catalog business and close its 19 catalog outlet stores over the course of 2011 and 2012. It will also consolidate its furniture outlet business, closing one store located in Rancho Cucamonga, Calif. Upon the closing of this store, the company will have two remaining furniture outlet stores to handle the disposition of surplus furniture from its retail store operations.
It will realign its call center operations by closing facilities in Grand Rapids, Mich. and Albuquerque, N.M. and consolidate all activity supporting its department store and online customers into three existing facilities in Columbus, Ohio, Pittsburgh and Milwaukee. The company will also close its custom decorating fabricating facility in Sacramento, Calif., leaving one facility remaining in Statesville, N.C.
J.C. Penney expects these changes will positively affect its bottom line in 2012, the first full year of implementation, by approximately $25 to $30 million. Additionally, there will be estimated one-time charges of approximately $30 million in the fourth quarter of fiscal 2010 and approximately $20 million during 2011 to reflect the transition.